What is fraud? A basic overview

Simply living everyday life opens the door to hundreds of possible fraudulent scams. Perhaps the easiest way to avoid a con is to look for the “too good to be true” aspect. But that’s easier said than done. Even vigilant individuals or businesses can be victims of fraudulent activity.

FindLaw defines fraud as an act intended to swindle someone. The perpetrator intentionally deceives someone for personal or financial gain. In general, a person committing fraud knowingly misrepresents an important fact. The victim believes that misrepresentation to be true and suffers a loss as a result.

Fraud carries the possibility of both criminal and civil penalties. Any victim of fraud can file for civil action against a fraudulent party, while government entities can pursue criminal cases.

Fraudulent behavior and its emotional toll

A person committing fraud exploits sensitive aspects of business and personal life, including:

Identity

Taxes

Credit cards and finance

Insurance coverage

Aside from feeling angry at the physical loss of money or goods, victims often feel shame or guilt after a scam. Feelings of embarrassment may cause some victims to allow the crime to go unreported.

Most commonly reported fraud in 2019

The Federal Trade Commission records and responds to reports of fraud. The FTC investigates these claims to get a better understanding of the common ways people try to commit fraud. In 2019, the FTC found that imposter scams were the number one reported type of fraud. Imposters posing as government or business entities, a romantic interest or loved one defrauded victims for over $667 million. Contact via telephone was the number one method scammers used to deceive victims.